Binance’s US arm is reportedly downsizing due to legal challenges with federal securities regulators.
In June, the U.S. Securities and Exchange Commission (SEC) filed 13 charges against Binance and founder Changpeng Zhao for allegedly selling unregistered securities, misleading investors about security protocols and mishandling customer funds.
Binance.US, which operates under BAM Trading, is also accused of colluding with its parent company to artificially inflate trading volume.
In a statement released Tuesday, Binance.US COO Christopher Blodgett said the lawsuit forced the U.S. platform to lay off more than 200 employees, about two-thirds of its workforce, according to a new report from Fortune.
Blodgett also notes that Binance.US’ revenues fell by about 75% after the SEC filed a motion asking the court to issue a restraining order to freeze the company’s assets. Although the judge denied the request, the lawsuit still had a significant impact on the exchange’s revenues.
Blodgett says the lawsuit and restraining order were a near-fatal blow to Binance, hurting the company’s ability to find partners like banks and market makers.
He says that in the months since the charges were filed, the number of Binance.US affiliates dropped from more than 20 to fewer than five. The SEC’s legal action also occurred during the bear market, which saw the collapse of the FTX stock exchange and other major players in the industry.
“Our trading volumes and our business in general have imploded.”
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